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Wasted Money
by Kent Jacobson
Published on this site: April 25th, 2006 - See
more articles from this month
What are your business costs due to poor quality (CoPQ) and
their effect on your bottom line? For this discussion, CoPQ
is any costs (dollar amount) you can associate with the inability
to correctly perform a task the first time. Common contributors
to CoPQ are; rework, scrap, customer returns, waste, meetings, shipping, travel. The list is lengthy and can cover a wide
range expenses a business incurs.
Every business probably has "CoPQ" expense accounts
set-up in their accounting structure but, categorizes them
as standard or expected expenses. In other words, "Just
part of doing business, plan for it". You or your company's
management may or may not be conscious of the potential savings
available. The potential savings can be assessed by simply
initiating performance measures on a few of these key expenses. Look at the obvious ones,
scrap, rework and customer returns for the last 6 months to
a year. You may have to work through the financial group to
get reports applicable to your situation.
Take action if there is an expense that looks out of the ordinary,
assign someone to track down the root cause. Traditional organizations
have the quality professionals perform this task. One cause
could be there is a single expense account or general fund
for all scrap, which should be broken down into detailed accounts that allow specific tracking of expenses.
If you are not comfortable undertaking this investigation,
inquire who may be the correct person by contacting your manager
or quality professional.
The basic framework to track CoPQ expenses should be in place,
take a look at your situation and see. There could be an opportunity
for you to contribute to the continued financial success of
your business.
Kent Jacobson, a.k.a. "Mr. Success" is a trusted
authority in the success field and provides valuable success
information for free through his website at: http://www.Shortcut2Success.com
. You can also read Kent's Success Blog to find more success
secrets at: http://www.Shortcut2Success.com/blog
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